From April 2028, company car tax changes will significantly increase Benefit-in-Kind rates for many plug-in hybrids — a shift that directly affects the reward value of one of the most visible benefits employees receive and gives HR teams a concrete reason to get involved in vehicle choice lists.

Although fleet teams typically manage leasing providers, manufacturers, maintenance costs and replacement cycles, the cars on offer shape recruitment, retention, reward and the wider employee experience. Employees may drive their company car every day, use it outside work and live with their choice for several years. Getting the list right means looking beyond the P11d value or monthly rental, according to an analysis published by The HR Director.

More choice isn't always better

It can be tempting to assume employees will value a company car scheme more if it offers as many models as possible. In reality, more choice can sometimes make the decision harder.

The UK vehicle market has changed significantly in recent years, particularly with the growth of battery electric vehicles and the arrival of new manufacturers. Employees may now compare brands they know well with manufacturers they have never considered, while also trying to understand differences in range, charging speeds, technology and specification.

That makes suitability, not volume, the key test. A good list should cater for different roles, lifestyles and practical requirements without becoming so broad that it is difficult to manage or navigate. Considerations should include annual mileage, access to charging, family requirements, accessibility, boot space, the type of journeys employees make — and, critically for newer manufacturers, the availability of parts for servicing and repairs.

BEV suitability deserves particular attention. A car with an impressive official range may look ideal on paper, but an employee with no home charging who regularly travels long distances will have a very different experience from someone who plugs in on their driveway every night.

Look beyond monthly rental

Cost remains important, but judging vehicles primarily by P11d value or monthly lease price can give HR and fleet teams an incomplete picture. A more expensive vehicle doesn't automatically cost the business more overall. Leasing costs reflect manufacturer discounts, expected depreciation and predicted residual values, which means leasing providers can offer very different prices for the same vehicle.

CO₂ emissions also need careful consideration. Changes to emissions testing are producing higher official CO₂ figures for some models, while the April 2028 company car tax changes will significantly raise BIK rates for many PHEVs. HR teams therefore need to weigh the tax implications for both employees and the business over the full period a car is likely to be provided.

Then there are the costs that emerge after delivery. Servicing, maintenance, tyres, insurance, energy use and downtime all affect total cost of ownership. A lower monthly rental can quickly lose its appeal if a car proves expensive to repair or repeatedly spends time off the road.

This is why TCO is often a more useful measure than headline price. Fleet Operations, for example, assesses vehicle choice in the context of the wider costs of running it rather than monthly rental in isolation. The cheapest option on paper might not be the most cost-effective in practice; a slightly higher rental could prove worthwhile if a vehicle is reliable, inexpensive to maintain and supported by a strong dealer and repair network.

Newer and less familiar manufacturers shouldn't automatically be ruled out, either. Many offer highly competitive vehicles and should be assessed on the same basis as established brands, including the support available once the vehicle is on the road.

The employee experience

Vehicle choice becomes much more of an HR issue when it starts affecting employees' day-to-day experiences. If workers must travel long distances for servicing, wait weeks for replacement parts or repeatedly cope without their car because of repair delays, frustration builds quickly. For someone who sees the car as an important part of their reward package, it can change how they feel about the benefit itself.

The same applies when the vehicle simply doesn't suit the employee — a growing family, or a house move that means they can't easily charge a BEV. Because these problems are far easier to avoid at the outset than to resolve afterwards, the employee should always be considered alongside the vehicle.

Employees also need information and guidance to make the right choice, particularly if they're switching to a BEV for the first time. HR can play an important role by making the process clear and explaining why certain vehicles are available while others aren't.

Keep choice lists current

One of the biggest mistakes HR teams can make is to build a company car list and then leave it until the next formal review. Vehicle prices and delivery times change, new manufacturers emerge, technology advances, and more real-world data about maintenance, reliability and driver satisfaction becomes available. Choice lists should evolve in tandem.

Analysing maintenance costs, downtime, repeat repairs and driver feedback for vehicles already on the fleet can reveal whether a car that looked good on paper is performing in practice. The same information can show how well the list is working for employees: Are certain cars consistently popular? Are drivers struggling with particular aspects of BEV ownership? Are some models generating disproportionate complaints or administration?

Regularly reviewing those questions helps businesses refine the list rather than relying on assumptions about what employees want. With the April 2028 BIK changes approaching and the UK vehicle market continuing to diversify, HR teams that engage with choice list design now will be better placed to protect both the reward value and the cost profile of their company car offering.